The Consumer Economy.

[Staunton]

Over the last thirty years or so, Britain has been transformed into what is called a 'consumer economy'. We buy stuff, we no longer make it – we leave the production to people in other countries. The trick of big business is to stimulate our consumption, so we are endlessly assailed by marketing, brand promotion, celebrity endorsement, product placement, sophisticated media campaigns. Coronation Street is no longer a gritty northern soap, it is a prime-time advertising platform.

 

And we are buying more and more from the multiple retailers, Asda (Wal-Mart), Tesco, Morrisons, and the high street or retail park branded outlets. These companies are dominating our communities. This phenomenon makes it harder for small and medium enterprises to compete. Of course there are niche markets, but the bulk of our purchasing today is from the volume retailers.

 

Now, there are a number of essential factors to bear in mind as we consider this transformation of our spending culture.

 

The big businesses that deal in this volume trade reward their London and foreign-based executives handsomely, but they are not nearly so generous with their front-line staff, who labour away in their shops, supermarkets and distribution centres across the country, and who are usually low paid, part time, temporary, or even on zero hour contracts.

 

A consumer economy is based on the spending power of the individual, and a community made up of low paid casual workers, people on zero hour contracts or who are unemployed simply doesn't have the collective income to purchase at a sustainable rate. So the local economies in provincial locations such as Sheffield are losing out.

 

We have seen a huge rise in debt. Recently there has been increased focus on the pay day loan companies, but even those of us who steer well clear of Wonga or the Money Shop are likely to have made recourse to our credit cards or overdraft facilities, or have a formal loan arrangement with our bank.

 

Now, I appeal to you not to groan as I raise the theme of tax avoidance – because that supermarket that nestles right in the heart of your locality is adept at not paying tax, those famous brand retailers likewise.

 

So. Where does that leave us - we ordinary people here in Sheffield? We are increasingly subject to low paid, part time, flexible working, increasingly vulnerable to zero hour contracts, or we are losing our jobs - joining the ranks of the unemployed, whilst our services - our hospitals and schools - are under attack.

 

Meanwhile, the supermarkets, the brand retailers, the media providers, the banks and the loan companies are all draining away what little money we do have to spend – the money we put in their hands does not stay local, it goes straight to London and slips quietly off shore.

 

My opposition to the supermarket and the branded outlet is not based on any left-wing convictions, but is due to a wish to see thriving local economies, based on independent retailers, small businesses, producers, manufacturers – earning an income, making a profit, employing local people, making money in the local community and recycling that money they make back into the community by spending locally.

 

My opposition to tax avoidance does not stem from some ideological stance, but is articulated because tax avoidance allows precisely those businesses who are out-competing and exploiting us (by the economies of scale their vast operations allow, by their big advertising budgets, through their influence in Westminster and Washington, by their ability to squeeze suppliers, through introduction of ever more ingenious technologies such as automated check-outs that mean further reduction in staff levels, and their ruthless determination to structure a low pay workforce) to take advantage of our consumption without accepting their share of the responsibility for the overall needs of the workforce they employ or the communities in which they make their profits. It means that the very companies who are dominating the economy of our local communities are simultaneously shirking their duty to those who are made vulnerable precisely because they are unemployed through unfair competition or on low pay due to the employment strategies that these same companies have structured specifically to enhance their bottom line.

 

We cannot have a thriving local consumer economy in a commercial environment dominated by the corporate sector and their volume marketing strategies. We cannot rehabilitate our local economy through consumer debt, which just enriches the banks and the loan companies. The money we spend in the local community, the amounts we spend on mobile phone contracts and media packages, the interest and fees we pay on the money we borrow, is going straight into the pockets of wealthy executives in London and abroad, and the taxes that should be funding the services and support we so desperately need are simply not being paid, they are quietly slipping offshore and away.

 

 

 

Further to the above, I also believe that the state should maintain responsibility for the provision of healthcare, education and social care, law and order, and the emergency services, and make social housing available according to need, and that these should be provided by a public sector funded by the taxpayer.

 

And if I add that I have a concern for the wellbeing of ordinary people, whether they come from Killamarsh or Kinshasa, Santiago or Southey Green, then I have expressed the fundamental principles that explain just about everything I have ever posted on sheffieldforum.

[Mecky]

I don't know why governments seem to think we can have an economy based on consumerism and the housing market.

 

Yesterday it was said that inflation would be linked to unemployment ... roughly translated means means high unemployment is a price worth paying for low inflation. Where have I heard that before? How will high unemploymentnt drive the economy forward, an economy that consumes more imported goods than home manufactured goods, and even then they may be foreign owned?

[truman]

I don't know why governments seem to think we can have an economy based on consumerism and the housing market.

 

Yesterday it was said that inflation would be linked to unemployment ... roughly translated means means high unemployment is a price worth paying for low inflation. Where have I heard that before? How will high unemploymentnt drive the economy forward, an economy that consumes more imported goods than home manufactured goods, and even then they may be foreign owned?

 

It was interest rates Mecky..you need to listen a bit better The idea being that as the economy strengthens and unemployment falls then a rise in interest rates can be better coped with...

[Mecky]

It was interest rates Mecky..you need to listen a bit better The idea being that as the economy strengthens and unemployment falls then a rise in interest rates can be better coped with...

 

That's right, I was interrupted in mid word for about 4 minutes before carrying on

[truman]

That's right, I was interrupted in mid word for about 4 minutes before carrying on

 

Wordus interruptus ? Could have been worse

[Vague_Boy]

A consumer economy is based on the spending borrowing power of the individual

 

Fixed for you.

 

Our consumer economy doesn't work without plentiful amounts of debt (and cheap oil), that's why everything went pear shaped when the credit taps were turned off in 2008 and why the "recovery" is as far away as ever.

 

 

Yesterday it was said that inflation would be linked to unemployment ...

 

Interest rates. Please pay attention.

 

Although the BoE statement is just so much flannel. They can't raise interest rates. They've painted themselves into a corner trying to "stimulate" the economy and are now trying to make it look as if the choice is still theirs. It isn't.

[Staunton]

Fixed for you.

 

Our consumer economy doesn't work without plentiful amounts of debt.

 

No doubt about it. But how can an ordinary person on a low wage ever hope to fund their basic needs if their only option is debt? Surely they will soon find that a substantial proportion of their meagre earnings is being wasted on servicing that debt. I don't think this is a solution. No doubt the banks would love us to think so, and so would the pay day loans companies, but surely we need to resist such an unsatisfactory solution to our woes?